TaxTMI 
TaxTMI 
2019 (6) TMI 1228
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.... the High Court of Andhra Pradesh. The Hon‟ble Court while disposing of the petition inter alia directed the CBI vide its order dated 10.08.2011 and categorically observed as under:- "we hasten to add that there may or may not genuine investments from the business point of view and that can be ascertained only by a detailed investigation, and we are sure that the investigating agency will appropriately segregate the genuine investors from others in the sweep of such investigation" 3. The Hon‟ble High Court while directing a detailed investigation by a special agency was of the view that it can only be ascertained after complete investigation as to which investments are non genuine investments from the business point of view. The Central Bureau of Investigation (CBI) has, thereafter filed FIR No. RC 19(A)/2011-HYD dated 17.08.2011 against the 74 accused on the basis of allegations in the writ petitions and thereby initiated investigations. Thereafter, the CBI has filed charge sheet no. 14 dated 10.09.2013 before the Court of Principle Special Judge for CBI cases Hyderabad, in CC no. 26/2013, which is pending adjudication arraying the appellant as an accused. ....
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.... 25.08.2006: Application in the given format for alienation of land made. 13.09.2006: District Collector addressed a letter to MRO, Yadiki and Tadipatri, Ananthapur District for enquiry and submission of proposal for alienation. 9.12.2006: District Revenue Officer (DRO) having full charge of Joint Collector, inspected the land sought to be alienated. 02.03.2007: Notices were published in respect of the lands in question inviting objections if any and no objections were reported. 24.3.2007: Tahsildar, Yadiki Mandal submitted a report confirming the publication of notice in the villages on 01.03.2007. 23.05.2007: Inspection notes were made by RDO & Tahsildar. 26.05.2007: RDO addressed a letter to the District Collector, confirming the Sub-registrar‟s highest basic value. 17.07.2007: Letter addressed by the District Collector to CCLA recommending alienation of land in favour of the appellant and suggesting the market price of Rs. 20,000/- per acre. 13.09.2007: DRO addressed a letter to CCLA certifying that "lands are not notified in terms of AP Assigned Lands (POT) Act, 1977. 08.02.2008: DRO in his incharge capacity as Joi....
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....s no bar in alienating the land to the Appellants. The investigation carried out under PMLA, 2002: 8. Under section 120-B read with Section 420 of IPC, 1860 and Section 13 of PC Act, 1988 are the Scheduled offences under the Act, a case has been registered under ECIR/09/HYZO/2011 dated 30.08.2011 (Annexure-B3) and investigation has been initiated under the provisions of PMLA, 2002. 9. Documents submitted by M/s Jagati publications Ltd, in response to the summons issued under PMLA, 2002, reveal inter alia that S/Shri V. Vijay Sai Reddy, Harish C. Kamarthy and Jella Jagan Mohan Reddy are the initial subscribers of the company, incorporated as private limited company on 14.11.2006 and later converted to public limited company on 12.01.2009. The registered office of the company is at Hyderabad, State of Telangana. a) Shri V. Vijay Sai Reddy and Shri Y.S. Jagan Mohan Reddy were the Directors for the period from 14.11.2006 to 21.06.2007 and from 21.06.2007 to 01.02.2011 respectively. b) During the year 2006-07, M/s Jagati Publications had raised share capital of Rs. 50.04 crores by way of allotting shares at the rate of Rs. 10/ per share. The company was yet to....
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....nd the same have been invested in M/s Carmel Asia Holdings Pvt. Ltd. as at 31.03.2014 in M/s Jagathi Publications Limited directly is 69.03% and 68.06% in M/s Janani Infrastructure Pvt. Ltd. and 2.37% in M/s Indira Television Limited. (c). M/s Carmel Asia Holdings Pvt. Ltd. had not declared any dividends to its shareholders from 2005 to 2013-14. The company has not received any dividends from any of the subsidiary companies, in which they made investments, as they have not declared any dividends so far. 11. M/s Penna Cement Industries Ltd. vide its letter dated 10.06.2015 inter alia informed the following- a). The Government of Andhra Pradesh vide GO No. 21 dated 15.03.2013 cancelled the Mining Lease granted to M/s. Penna Tandur Cement Company Ltd. and the cancellation is Sub Judice in Writ Petition No. 8703 of 2013 pending on the file of the Hon‟ble High Court of Andhra Pradesh. b). M/s Pioneer Holiday Resorts Limited had constructed the hotel building and the same was completed in the month of March, 2010 and also furnished details completion of Hotel Building floor wise and the same are tabulated hereunder- Sl. No. Floor Area (In sq. ....
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....ding Pvt. Ltd. and M/s Jagathi Publications Pvt. Ltd. (companies of Sh. Y.S. Jagan Mohan Reddy). The Enforcement Directorate vide provisional attachment order has attached 231.09 acres of land valued at Rs. 1,15,54,500/-. Out of 231.09 acres of land, 114 acres of land belonged to assigned lands. 13.1 The allegation of the Enforcement Directorate is that the farmers who were assigned lands (to the extent of 114 acres) were forced to relinquish the assigned land to the Government and thereafter, the land was allotted to the appellant company without following the provisions of A.P. Assigned Lands (Prohibition of Transfers) Act 1977 (As amended in Act 8 of 2007 & Act 21 of 2008) (hereinafter called POT Act). 13.2 It was also alleged on behalf of respondent that the aforesaid favour was given by the then Chief Minister Late. Y.S. Rajshekhar Reddy in lieu of the quid pro quo investments made in Jagan Mohan Group of Companies. The details of quid pro quo investments done in view of the aforesaid alienation as per para 11 of the charge sheet are as under: Date Favour Date of Investment Amount of Investment Invested in 16.12.2006 Completion of resumption of as....
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....20,000 per Acre from Rs. 14,500 per Acre. The District Collector clarified to the Chief Commissioner Land Administration vide letter dated 08.02.2008 that POT Act is not attracted in the proposed land for alienation. 14.6 The proposal for alienation was placed before Empowerment committee on 04.08.2008 and the committee recommended the alienation at the higher rate of Rs. 50,000 per Acre. The Advocate General of State gave a legal opinion dated 08.07.2008 confirming that in case of surrender, whether it is by inducement or voluntary, provisions of POT Act are not attracted. 14.7 Draft memorandum dated 01.10.2008 was prepared and was approved by the then Chief Minister for alienation of land to the extent of Ac. 231.09 cents on payment of market value of Rs. 50,000 per acre. 14.8 The cabinet of Council of Ministers in the meeting held on 29.11.2008 approved the proposal for alienation of land to the extent of Ac. 231.91 cents in Kamalapadu, Gudipadu, Kudanakota and 23/2 Nittoor Villages, Yadiki (M) in favour of M/s Penna Cement Industries, Hyderabad on payment of Market value of Rs. 50,000 per acre. 14.9 The department of Revenue issued GO MS No. 1490 was issued on 12....
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....ation order. 19. It might be possible that some technical discrepancies have been crepted by following the procedure, but, ultimately one has to see the overall conduct of the parties. It is also correct that there are allegations against the appellants in CBI Charge-sheet, but this Tribunal does not wish to make any comment on those allegations, the same are to be tested in law before the Special Court in the present proceedings, the only concern of this Tribunal is to examine the investigation carried out under PMLA t as well as the validity of PAO and confirmation thereof are sustainable or not. 20. There is a force in submission of senior counsel appearing on behalf of appellants that the provisions of PMLA are not attracted as none of the allegations made regarding alienation of land and violation of the POT Act constitute a schedule offence prescribed in the PML Act as the alienation of land was done in favour of the appellant with approval of Council of Ministers. The decision of the Council of Ministers was never challenged and therefore same cannot be questioned the present proceedings. The Respondent no. 1 cannot sit in judgment over the policy decisions taken by th....
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....s each in Jagathi Publications on 09.03.2009 and on 23.03.2009 by M/s Pioneer Infrastructure Holdings Pvt. Ltd). One is failed to understand, how it is possible. 26. It is not denied by the counsel for the respondent that shares have been issued but he argued that those are all eye wash and waste of paper and have no market value. His argument is that if there is valid investment, why dividend has not issued and how the shares were purchased on higher price. It is not denied by the respondent that the investment money was a clean money. It is also alleged that share certificate of total value of Rs. 25 Crore was issued on 01.06.2009 in anticipation of additional investment for Rs. 5 Crores. 27. It is a matter of fact that the land property at Banjara Hills was acquired by the appellant through various registered sale deeds (16 in total) from the year 1988 to 2008. The total extent of the area is 9759.16 sq. yards in which the additional area of 397 sq. yards for road widening purchased by the appellant in 2008 is included. The land use of the aforesaid land was converted from residential to general commercial by the State Government vide GO. Ms. No. 324 of 1998 and requisite ....
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.... appellant had surrendered to an extent of 166.24 sq. yards, for the proposed road widening for free of cost to the concerned authorities. Accordingly, the requisite fee was paid by the appellant and sanctioned third cellar for parking and 8th and 9th floor. 33. The appellant case is that the appellant had paid a total sum of Rs. 65,02,449/- towards the permit issued in the year 2005 and Rs, 14,24,500/- towards bank guarantee. The appellant had further paid a sum of Rs. 95,54,500/- for revised permit in the year 2009 which includes the Developmental and permit fee, Infrastructure Impact fee etc. Having paid a sum of Rs. 95,54,500/- over and above what was paid by the appellant in the year 2005, it cannot be the case that the appellant was in any way granted financial favours or benefits by the State Government. The revised building plan for construction of hotel was sanctioned on 11.11.2009 vide permit No. 10/17, well after the then Chief Minister alleged to have benefited the appellant had expired on 2-9- 2009. 34. It was submitted that no relaxation was made to the appellant company and the entire process was followed by the government officials as per law and none of th....
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....008, the construction of the hotel building started in 2008 and completed in March 2010 after the same was regularised by GHMC vide Permit No. 10/17 dated 11.11.2009. 39. It is submitted that from 2009 to till date there is no notice/direction/action by the municipal authorities to demolish the structure meaning thereby the whole structure is completely legal and according to the municipal rules. Even otherwise the Enforcement Directorate or the Central Bureau of Investigation has not alleged that the permission/the regularisation even by the municipal corporation is illegal and not according to the municipal rules. It is stated that it is not the case of ED that such regularisation was done illegally or such a regularisation was impermissible in law, what has been regularized is legally permissible, such regularisation as per law do not tantamount to any offence under any act much less under IPC or a schedule offence. Common discussions in both appeals 40. It appears from the impugned order that the show cause notice issued u/s 8(1) was mechanically issued without satisfying itself that there is "reason to believe that any person has committed an offence u/s 3 or is in po....
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....ddy belong to same district in Andhra Pradesh. 45. It has come on record that Sh. P Pratap Reddy has also invested earlier in 1996 as per material available on record. Shri. Jagan Mohan Reddy‟s Company and therefore, there is a force in the submission of the appellants that when the aforesaid companies (in question) were incorporated, it was suggested by Late Sh. YSR Reddy to invest and Sh. P Pratap Reddy after deliberations and discussions about the prospect of investing in a media company by the Board of Directors and comparing with other existing media companies decided to invest in the companies in question. The said material is available on record. 46. It is the case of appellants that at the time of investment (share premium at Rs. 350 in M/s Jagati Publication and Rs. 252 in M/s Caramel Asia) the Eenadu Newspaper which was the leading Telugu Newspaper evaluated its share at Rs. 5,28,630/-. At the time of deciding to invest, the details of the compiled data including the annual report and quotes of Sun TV and Deccan Chronicle were also placed before the Board of Directors meeting and comparisons were made. The Sakshi Newspaper published by M/s Jagati Publication h....
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.....I.) Department dated 29.03.2008. 50. The allegation against the appellants is that this prospecting license was granted ignoring the ML application already submitted by M/s. Ultra Tech Cement Limited, which was withdrawn by the company subsequently iii) Grant of first renewal of Mining Lease for limestone in favour of M/s Walchand Tandur Cement Company Limited vide GO Ms. No. 76, Industries & Commerce (M.I.) Department dated 26.02.2009 and change of name of the company from M/s. Walchand Tandur Cement Company Ltd. to M/s. Penna Tandur Cement Ltd. vide GO Ms. No. 25, Industries and Commerce Department dated 29.01.2009 and iv) Permission for Hotel construction at Banjara Hills, Hyderabad and relaxations thereon vide Memo No. 2710/M1/09, MA & UD dated 03.03.2009 to M/s. Pioneer Holiday Resorts Limited. 51. Admittedly, the perspective license was granted for a period of three years, which has already been expired. Therefore, at present, this Tribunal is not inclined to release the attachment of property i.e. M/S. PENNA CMEENT INDUSTRIES LIMITED (Lands) AC 231.09 Cents of land in Kamalapadu, Gudipadu, Kundankota and Nittor Village of Yadaki Mandal, Anantapur District, Andhra Prad....
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....ot attach any property by passing provisional attachment order unless there are reason to believe that the impugned property is definitely involved in money laundering within the meaning of Section 2(1)(u) read with Section 3 of the Act. 56. Reason to believe is not a formality but it should akin to prima facie findings that the person concerned is positively involved in money laundering. The provisional attachment order can only be passed if such exercise is done within the four corners of settled law. The meaning of proceeds of crime is any property derived or obtained directly or indirectly as a result of criminal activities relating to a schedule offense. 57. Section 35 of PMLA provides the Procedure and powers of the Appellant Tribunal which says that Tribunal shall not be bound by the procedure laid down by Code of Civil Procedure but shall be guided by the principles of natural justice and subject to the other provisions of this Act and Appellant Tribunal shall have powers to regulate its own procedure. 58. One of the main objects and reasons of this Act is to confiscate of proceeds of crime apart to the criminal liability if the accused has committed under the prov....